Exhibit 10.14
LEASE AGREEMENT
ELITE AUTOMOTIVE GROUP, LLC, Landlord
MIDNIGHT AUTO FRANCHISE CORP.,
a Michigan corporation, Tenant
[___________________________]
PREMISES
MARCH 30, 2007
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LEASE AGREEMENT
THIS LEASE
AGREEMENT ("Lease") is made as of March 30, 2007,, by and
between ELITE AUTOMOTIVE GROUP, LLC, an Oklahoma limited liability
company
("Landlord"), whose address is 12800 SW 58th Street, Mustang, OK
73064, and,
MIDNIGHT AUTO FRANCHISE CORPORATION a Michigan corporation
("Tenant"), whose
address is 22600 Hall Road, Suite 205, Clinton Township, Michigan
48036.
MIDNIGHT HOLDINGS GROUP, INC., ALL NIGHT AUTO OF YUKON, INC., ALL
NIGHT AUTO OF
OKLAHOMA, INC. and ALL NIGHT AUTO STORES, INC. have joined in this
Agreement as
joint and several Guarantors (collectively, the "Guarantors").
For and in
consideration of the mutual promises, covenants and agreement
herein contained, the receipt sufficiency of which consideration is
hereby
acknowledged, Landlord and Tenant hereby agree as follows:
ARTICLE I
DEFINITIONS
The Definitions delineated within this Article I contain the
principal terms of
this Lease, as more particularly described in the remaining
Articles of this
Lease. Each reference in this Lease to any Definitions within this
Article I
shall be construed to incorporate the data stated herein.
SECTION 1.1 "ADDITIONAL RENT" shall be composed of Tenant's
Proportionate Share
of, (a) real estate taxes and assessments as provided in Section
4.2(a) below,
and (b) Landlord's Insurance, as defined in Section 4.2(b) below,
and any other
amounts other than the Base Rent that are required to be paid by
Tenant to
Landlord pursuant to this Lease.
SECTION 1.2 "COMMENCEMENT DATE" shall mean the date hereof,
provided that on the
date hereof: (a) Landlord delivers the Premises to Tenant free of
all occupants,
and (b) Tenant has received all permits necessary to conduct
Tenant's business
at the Premises, which the Tenant acknowledges has occurred as
evidenced by its
execution of this Lease..
SECTION 1.3 "EFFECTIVE DATE" shall mean the date on which the last
party to sign
and deliver this Lease has signed and delivered it to the other
party.
SECTION 1.4 "LEASE YEAR" shall mean the twelve (12) month period
beginning on
the Rent Commencement Date and ending on the anniversary thereof or
any
successive twelve (12) month period after the end of the first
Lease Year. If
the Rent Commencement Date falls on other than the first day of the
month, then
the first Lease Year shall mean the period from the Rent
Commencement Date until
the first day of the month immediately following the Rent
Commencement Date plus
the twelve (12) month period thereafter.
SECTION 1.5 "BASE RENT" shall mean (which amount is subject to
reduction
pursuant to section 4.3 below) $[*] per month.
SECTION 1.6 A "BUSINESS DAY" shall mean any day when national banks
are open for
business, excluding a Saturday, Sunday or a public holiday under
the laws of the
State of Oklahoma.
SECTION 1.7 "PERMITTED USE" shall mean all lawful purposes approved
by written
consent of the Landlord, including, but not limited to, the
operation of an
automotive repair center offering under hood
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and under body automotive repair services such as oil changes, tune
ups, tire
changes, engine repairs, transmission service and related
services.
SECTION 1.8 "PREMISES" shall mean the building and surrounding
parking area, all
as shown on the Site Plan marked Exhibit "A" attached hereto, and
commonly known
as 539 S. Mustang Road, Yukon, Oklahoma.
SECTION 1.9 "BASE TERM" shall mean the initial term of the Lease
beginning on
the Rent Commencement Date and ending on at the expiration of the
tenth (10th)
Lease Year.
SECTION 1.10 "RENEWAL PERIOD" shall mean any of the two (2) five
(5) year
periods for which the Lease is extended beyond the Base Term
pursuant to Section
3.3 hereof.
SECTION 1.11 "RENT" shall mean Base Rent, together with Additional
Rent, and all
other sums due hereunder.
SECTION 1.12 "RENT COMMENCEMENT DATE" shall mean the Commencement
Date.
SECTION 1.13 "TENANT'S PROPORTIONATE SHARE" shall mean 100%.
SECTION 1.14 "TERM" shall mean the Base Term or any Renewal
Period.
ARTICLE II
PREMISES
SECTION 2.1 PREMISES. Subject to the terms, covenants, conditions
and provisions
of the Lease, Landlord does hereby demise and lease to Tenant and
Tenant does
hereby rent and take from Landlord and shall peaceably and quietly
hold and
enjoy the Premises identified in Article I.
SECTION 2.2 COVENANT OF TITLE AND PEACEFUL POSSESSION. Landlord
warrants and
covenants that it has good and marketable title to the Premises in
fee simple
and the right to make this Lease for the term aforesaid and, upon
demand by
Tenant, Landlord will furnish Tenant with satisfactory evidence
thereof.
Landlord further warrants and represents that, as of the date
hereof, there are
no zoning ordinances which will prohibit Tenant from using the
Premises pursuant
to Section 5.4 hereof. Landlord agrees that it will put and keep
Tenant into
complete and exclusive possession of the Premises, free from all
restrictive
covenants, encumbrances, liens, easements and leases and that if
Tenant shall
pay the rental and perform all the covenants and provisions of this
Lease to be
performed by Tenant, then the leasehold estate granted to Tenant
hereby shall
not, during the term hereby demised, be disturbed and Tenant shall
freely,
peaceably and quietly enjoy and occupy the full possession of the
Premises, and
the tenements, hereditaments, and appurtenances thereunto belonging
or in any
way appertaining, without molestation or hindrance by any person
whomsoever. If
at any time during the term hereby demised the title of Landlord
shall fail or
be discovered not to enable Landlord to grant the term hereby
demised, Tenant
shall have the option of canceling and terminating this Lease, and
thereafter
all of Tenant's liability hereunder shall cease, but Tenant's right
to damages,
if any, shall survive.
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ARTICLE III
TERM
SECTION 3.1 BASE TERM. The Base Term of the Lease, as specified in
Article I
shall commence on the Rent Commencement Date specified in Article
I.
SECTION 3.2 TENANT'S WORK. Tenant agrees, at its sole cost and
expense, to
expeditiously provide and complete all work of whatever nature
necessary to make
the Premises ready for Tenant to conduct its business therein
("Tenant's Work").
Within ten (10) days (the "Plan Approval Period") after the receipt
of the plans
and architectural drawings for the improvements that Tenant
proposes to
construct on the Premises (the "Plans"), Landlord shall review the
Plans and
notify Tenant whether it approves or rejects them, which approval
shall not be
unreasonably withheld or conditioned by Landlord. In the event
Landlord fails to
approve or reject the Plans by the end of the Plan Approval Period,
the Plans
shall be deemed to be approved by Landlord. For a rejection to be
effective,
Landlord must give written, detailed reasons for such rejection. If
the Plans
have been rejected, then Tenant may submit revised plans addressing
the reasons
for such rejection and in the event Landlord fails to approve or
reject (with
written, detailed reasons) the revised plans within the later of
ten (10) days
after Landlord receives the same and Tenant's request for
Landlord's approval
thereof, the Plans, as revised shall be deemed to be approved by
Landlord. Prior
to Landlord's delivery of possession of the Premises to Tenant, and
with
Landlord's prior written consent, which consent will not be
unreasonably
withheld, Tenant shall be permitted to begin Tenant's Work and
otherwise install
fixtures and equipment so long as such activities do not interfere
with other
construction work or the occupancy of any other person; and it is
agreed by
Tenant that Landlord shall have no responsibility or liability
whatsoever for
any loss of or damage to any improvements, fixtures, or other
equipment so
installed or left on the Premises.
SECTION 3.3 RENEWAL PERIOD. So long as there is no Event of Default
existing
under this Lease, either at the time of exercise or at the time the
extended
term commences, Tenant will have the option to extend the Term for
two (2)
additional successive Renewal Periods of five (5) years each on the
same terms,
covenants, and conditions of this Lease. Tenant will exercise its
option (if at
all) by giving Landlord written notice (the "Renewal Notice") at
least one
hundred eighty (180) days prior to the expiration of the Base Term
or the then
current Renewal Period.
ARTICLE IV
RENT
SECTION 4.1 BASE RENT. Tenant shall pay to Landlord Base Rent in
advance, in
consecutive monthly installments in the amounts set forth in
Article I. The
monthly Base Rent payment shall be payable by Tenant on or before
the first day
of each month at the address of the Landlord specified above, or
such other
address as Landlord may designate from time to time, without prior
demand
therefore and without any deductions or setoff whatsoever. In the
event the Rent
Commencement Date shall be a day other than the first day of a
calendar month,
then the Term of this Lease shall be deemed extended by the number
of days
between the Rent Commencement Date and the first day of the next
succeeding
calendar month. In such case, Tenant shall pay pro-rata Base Rent,
in advance,
for the period from the Rent Commencement Date to the first day of
the next
calendar month.
SECTION 4.2 ADDITIONAL RENT. Tenant shall pay to Landlord, as
Additional Rent
promptly when the same are due, without any deductions or setoff
whatsoever,
Tenant's Proportionate Share of the following charges and Tenant's
failure to
pay such amounts or charges when due shall carry with it the same
consequences
as Tenant's failure to pay Base Rent:
(a)
REAL ESTATE
TAXES AND ASSESSMENTS.
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(i) Landlord shall pay before delinquency all general real
estate
taxes and assessments levied against the Premises. Tenant shall pay
to Landlord,
from time to time, during the Term and within thirty (30) days
following
Landlord's request therefor which request will be accompanied by a
paid bill or
photocopy thereof, Tenant's Proportionate Share of the ad valorem
general real
estate taxes (including all special benefit taxes and special
assessments but
excluding so-called impact fees) so levied and assessed. In no
event shall
Tenant be required to pay real estate taxes or assessments
pertaining to any
period prior to the Rent Commencement Date or subsequent to the
expiration of
the Lease. Any liability hereunder for any period in which the Term
of this
Lease shall not cover an entire tax year shall be properly
prorated.
(ii) All special benefit taxes and special assessments assessed
against the Premises shall be spread over the longest time
permitted and
Tenant's liability for installments of such special benefit taxes
and special
assessments not yet due shall cease upon the expiration or
termination of this
Lease. In no event shall Tenant be obligated to pay any impact fees
whether or
not billed by the taxing authority as a special benefit tax or a
special
assessment.
(b)
LANDLORD'S INSURANCE. Tenant agrees to pay Landlord, as
Additional
Rent, Tenant's Proportionate Share of all insurance premiums with
respect to
insurance Landlord shall be required to maintain as provided in
Section 6.2
below. Landlord shall estimate the annual cost of such Landlord's
Insurance and
will notify Tenant from time to time of Tenant's Proportionate
Share, which
shall be paid monthly, in advance along with the Base Rent.
SECTION 4.3 REDUCTION IN BASE RENT. If interest rates during the
Term decrease,
such that Landlord's monthly payment of principal and interest on
the mortgage
it now has on the Premises (the "Current Mortgage") would be
reduced if Landlord
refinanced the Current Mortgage (assuming that the new refinance
mortgage would
be for the same amount as the then-outstanding principal amount due
under the
Current Mortgage, and the new refinance mortgage had an
amortization period
which ended at the same time as the amortization period of the
Current Mortgage
and assuming that Landlord could obtain such refinancing with
reasonable
effort), then the Base Rent hereunder shall decrease by the same
amount that
such monthly payment of principal and interest would decrease if
Landlord in
fact refinanced its Current Mortgage.
SECTION 4.4 DEPOSIT.
(a) On the first twelve (12) monthly rent payment dates under
this
Lease,
Tenant shall pay to Landlord an amount equal to $[*] per month,
to
be held by
Landlord as collateral security, and not prepaid rent, for the
faithful
performance by Tenant of all covenants, conditions and
agreements
of this
Lease (the "Security Deposit"). Landlord, or its agents or
successors, shall not be obligated to hold the Security Deposit as
a
separate
fund, but may commingle the same with other funds. The amount
of
said
Security Deposit shall be repaid without interest to Tenant after
the
termination of this Lease, provided Tenant shall have made all
payments
and
performed all covenants and agreements required under this
Lease.
Landlord
may appropriate and apply the entire Security Deposit or so
much
thereof as
may be necessary to compensate Landlord for any breach under
this Lease
on the part of Tenant, and Tenant upon demand shall forthwith
restore
the Security Deposit to the original sum deposited. Neither the
Security
Deposit nor any installment of rent prepaid by Tenant shall be
deemed
liquidated damages in the event of a default by Tenant under
this
Lease.
(b) In the event of a sale or transfer of Landlord's estate or
interest
in the Land and Building, Landlord shall have the right to
transfer
the Security Deposit to the purchaser or transferee, and
Landlord
shall
thereupon be automatically released by Tenant from all liability
for
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the return
of the Security Deposit. No mortgagee or purchaser of the
Building
at any foreclosure proceeding shall be liable to Tenant for any
or all of
such Security Deposit unless Landlord has actually delivered
the
same in
cash or by credit to such mortgagee or purchaser.
ARTICLE V
MAINTENANCE AND USE OF PREMISES
SECTION 5.1 CARE OF PREMISES. Except as otherwise set forth below,
Tenant shall,
at its sole cost and expense, (a) keep the entire Premises in good
order,
condition and repair, including all plumbing, electrical, heating,
air
conditioning, ventilating, water and sewer systems and equipment,
doors, door
frames, windows and window frames installed on or in the Premises,
in a clean,
sanitary, safe, properly repaired condition in accordance with the
laws of
Oklahoma and in accordance with all directions, rules, regulations,
ordinances,
statutes and orders of all governmental agencies, and the proper
offices thereof
having jurisdiction over the Premises; and (b) properly store, out
of view of
the public, and promptly and regularly remove from the Premises,
all garbage,
trash and rubbish. Tenant shall not dispose of any foreign
substance in any
plumbing facilities, adjoining or connecting sewer lines or mains,
or use such
facilities for any purpose other than that for which they were
constructed; and
the expense for any breakage, stoppage, damage or additional repair
resulting
therefrom and attributable to the acts of Tenant or its
subtenants,
concessionaires, licensees, invitees, agents, contractors, servants
or
employees, shall be borne by Tenant. Notwithstanding the foregoing:
(i)
Landlord, at its sole cost and expense, shall keep the roof,
exterior walls
and/or foundation of the building in compliance with all applicable
laws, and in
good order, condition and repair, including, but not limited to,
any necessary
replacements of said items, during the Term; and, (ii) nothing
herein shall
prevent Tenant from operating the Premises as an auto repair
facility (including
under hood and under body auto repairs).
SECTION 5.2 USE OF PREMISES. Tenant covenants and agrees to use the
Premises
only for the Permitted Use and shall not use the Premises for any
purpose in
violation of any law, ordinance, regulation, or building, use or
zoning
restriction. Landlord agrees that during the Term and any
extensions or renewals
thereof, Landlord, or any affiliate of Landlord, will not enter
into any lease
of space, within a radius of five (5) miles from the Premises, that
permits such
premises to be used as an auto repair facility (including under
hood and under
body auto repairs).
SECTION 5.3 SIGNAGE AND ADVERTISING. Tenant shall not paint,
decorate or affix
any signs, lighting or other materials to the exterior of the
Premises without
Landlord's prior written consent, which shall not be unreasonably
withheld.
Notwithstanding the foregoing, Tenant shall have the right, at
Tenant's sole
cost and expense, to install signage at the Premises that is
professionally
prepared and is consistent with other signage used at other
locations leased by
Tenant, provided that Tenant, at its sole cost and expense, must
obtain any
necessary permits or approvals from the local municipality before
the
installation of said signage.
SECTION 5.4 UTILITIES. Landlord shall provide the necessary mains
and conduits
in order that water and sewer facilities, natural gas and
electricity are
available to the Premises, and Tenant shall promptly pay for its
use of the
same. Notwithstanding anything to the contrary contained in this
Lease, in the
event that any of Tenant's utilities, systems or services are
interrupted by
reason of the malicious or negligent acts or omissions of Landlord,
its agents,
employees or contractors, and as a result thereof Tenant, in the
exercise of
prudent business judgment, cannot open for business for a period
exceeding one
(1) business day, Base Rent and all other charges under this Lease
shall abate
for such period as it cannot remain open for
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business, and until such utilities, systems or services are again
restored and
Tenant can reopen for business.
SECTION 5.5 ALTERATIONS TO PREMISES. Tenant shall have the right to
make repairs
to, and nonstructural alterations, additions and improvements in,
the building
and the Premises in such manner and to such extent as may from time
to time be
deemed necessary by Tenant for adapting the building and the
Premises to the
requirements and uses of Tenant and for the installation of its
fixtures and
equipment. Tenant shall not be obligated, if it makes any
alterations, additions
or improvements to the Premises as herein provided, to restore said
premises,
upon vacating the same, to the condition in which said premises
were prior to
the making of such alterations, additions or improvements. Tenant
shall not make
any structural alterations, additions or improvements to the
building or the
Premises without Landlord's written consent.
ARTICLE VI
INSURANCE AND INDEMNIFICATION
SECTION 6.1 TENANT'S INSURANCE. Tenant shall at all times during
the Term of
this Lease subsequent to the Commencement Date, keep in full force
and effect,
at its sole cost and expense, the following types and amounts of
insurance:
(a)
Comprehensive public liability and property damage insurance
and
product liability insurance insuring against claims for personal
injury,
sickness, disease or death and property damage, in or about the
Premises,
including independent contractor coverage, with limits of public
liability not
less than Two Million ($2,000,000.00) Dollars per occurrence and
limits of
property damage liability of not less than One Million
($1,000,000.00) Dollars.
(b) Fire
and extended coverage insurance covering Tenant's merchandise,
personal property, fixtures, improvements, wall coverings, floor
coverings,
window coverings, alterations, furniture, equipment and plate
glass, against
loss or damage by fire, windstorm, hail, explosion, riot, damage
from aircraft
and vehicles, smoke damage and vandalism and malicious mischief and
such other
risks as are from time to time covered under "extended coverage"
endorsements
and special extended coverage endorsements commonly known as "all
risks"
endorsements in an amount equal to the greater of the full
replacement value or
that required by Landlord's mortgagee from time to time.
(c) If
during the Term of this Lease, Tenant shall receive Landlord's
prior written consent to operate on the Premises a boiler or other
pressure
devices, Tenant shall, as a precondition to installing the same,
place and
maintain boiler insurance with limits of liability in an amount not
less than
One Hundred Fifty Thousand ($150,000.00) Dollars per occurrence,
and providing
coverage for the full replacement value thereof.
(d) If the
nature of Tenant's use of the Premises requires that any or all
of its employees be provided coverage under State Workers'
Compensation
Insurance or similar statutes, Tenant shall keep in force Workers'
Compensation
Insurance or similar statutory coverage containing statutorily
prescribed
limits.
(e) It is
expressly understood and agreed that the foregoing minimum
limits of insurance coverage shall not limit the liability of
Tenant for its
acts or omissions as provided in this Lease. All of the foregoing
insurance
policies (with the exception for Workers' Compensation Insurance to
the extent
not available under statutory law) shall name Landlord and such
other interested
parties as Landlord shall from time to time designate as insured as
their
respective interests may appear, and shall provide that any
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loss shall be payable to Landlord and any other interested parties
as Landlord
shall designate. Tenant may provide the foregoing insurance under a
blanket
policy, provided that such blanket policy shall have an endorsement
thereto to
reflect the required protective coverage for Landlord and its
designees. All
insurance required hereunder shall be placed with companies
licensed to do
business in the State wherein the Premises is located and which
companies are
rated A:Xll or better in "Best's Key Rating Guide." All such
policies shall be
written as primary policies, non-contributing with and in excess of
coverage
which Landlord may carry. Tenant shall deliver copies of such
policies and all
endorsements thereto prior to the Commencement Date, together with
evidence from
the insurer that such policies are fully paid for, and that no
cancellation,
material change, non-renewal or lapse in coverage thereof shall be
effective
except upon thirty (30) days prior written notice from the insurer
to Landlord
and its designees. If Tenant shall fail to procure and/or maintain
said
Insurance, Landlord may, but shall not be obligated to do so, and
without
waiving any other rights under this Lease, procure and maintain any
one or more
portions of Tenant's required insurance policies, at the expenses
of Tenant; and
Tenant shall reimburse Landlord therefore within ten (10) days of
invoice.
SECTION 6.2 LANDLORD'S INSURANCE. Landlord shall be required to
maintain the
following types and amounts of insurance during the Term of this
Lease.
(a) Fire
and extended coverage insurance covering the Premises, against
loss or damage by fire, windstorm, hail, explosion, riot, damage
from aircraft
and vehicles, smoke damage and vandalism and malicious mischief and
such other
risks as are from time to time covered under "extended coverage"
endorsements
and special extended coverage endorsements commonly known as "all
risks"
endorsements in an amount equal to the greater of the full
replacement value or
that required by Landlord's mortgagee from time to time.
(b) Boiler
and machinery insurance with limits of liability in an amount
not less than One Hundred Fifty Thousand ($150,000.00) Dollars per
occurrence,
providing for full replacement value thereof, with respect to
boilers and other
pressure devices utilized to operate Common Areas or utilities
provided in
common to one or more tenant.
(c) If the
nature of Landlord's undertakings with respect to this Lease
requires that any or all of its employees be provided coverage
under State
Workers' Compensation Insurance or similar statutes, Landlord shall
keep in
force Workers' Compensation Insurance or similar statutory coverage
containing
statutorily prescribed limits.
(d)
Landlord shall competitively bid for the procurement of all
insurance
policies covering the Premises. Landlord will retain in its
possession the
original policy and all endorsements, renewal certificates and new
policies, if
any, issued during the Term, but will provide Tenant upon request
certificates
evidencing the existence of such policy.
SECTION 6.3 WAIVER OF SUBROGATION. Landlord and Tenant hereby
release each other
and their respective agents and employees from any and all
liability to each
other or anyone claiming through or under them by way of
subrogation or
otherwise for any loss or damage to property caused by or resulting
from risks
insured against under Sections 6.1 and 6.2 hereinabove, pursuant to
insurance
policies carried by the parties hereto and in force at the time of
any such loss
or damage; provided, however, that this release shall be applicable
and in force
and effect only to the extent of insurance proceeds actually
received by the
releasor from the pertinent insurance carrier, and only with
respect to loss or
damage occurring during such time as the releasor's policies
contain a clause or
endorsement to the effect that any such release shall not adversely
affect or
impair such policies or prejudice the right of the releasor to
recover
thereunder. Landlord and Tenant each agree that each will request
its insurance
carriers to include in its policies such a clause or endorsement,
and will
include such a clause only so long as it is includable
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without additional cost, or if additional cost is chargeable
therefor, only so
long as the other party pays such additional cost. Each party shall
notify the
other party of such cost, and the other party may pay such cost but
shall not be
obligated to do so.
SECTION 6.4 HOLD HARMLESS AND INDEMNIFICATION. Tenant shall defend,
indemnify
and save Landlord harmless from legal action, damages, loss,
liability and any
other expense (including reasonable attorney fees) in connection
with loss of
life, bodily or personal injury or property damage arising from or
out of all
acts, failures, omissions or negligence of Tenant, its agents,
employees or
contractors which occur on the Premises, unless such legal action,
damages, loss
liability or other expense (including reasonable attorney fees)
results from
negligence or intentional misconduct of Landlord, its respective
agents,
contractors, employees or persons claiming through it. Landlord
shall defend,
indemnify and save Tenant harmless from legal action, damages,
loss, liability
and any other expense (including reasonable attorney fees) in
connection with
loss of life, bodily or personal injury or property damage arising
from or out
of all ne